[opendtv] Re: HDTV DVB-T receiver for the UK
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 3 Feb 2005 09:58:47 -0500
At 9:12 AM -0500 2/3/05, Tom Barry wrote:
>Most of the cable channels are owned by the networks, and most already
>have commercials. I don't know why the networks would want to pull them
>off cable but it would seem to make sense to instead make some of them
>non-cable-exclusive and also offer them as sub-channels. They wouldn't
>need must carry to keep them on cable, though a little renegotiating
>would maybe be needed.
>
>IOW, I don't understand why economies of scale don't suggest making all
>national channels potentially available in all venues.
>
I've been through all of this before, but one more time, here's the
Exec Summary...
There are three big pots of money out there is TV land. The total
revenues in these pots is in excess of $40 billion annually.
1. Network revenues - about $15 billion
2. Broadcast station revenues - about $15 billion
3. Cable subscriber fees and local ad insertion revenues
The conglomerates control all of #1, and about 40% of #2. They would
like to own ALL current affiliates for several reasons:
1. Economies of scale - they could program the entire country from a
few regional operations centers, and largely eliminate most of the
jobs that are in local broadcast facilities today.
2. To control the remainder of the $15 billion ad revenues that they
do not control today.
The conglomerates receive subscriber fees from cable and DBS. But
they also give up local ad insertion slots to the cable companies.
Currently these slots generate about $7 billion annually. Nobody
knows for sure how much the conglomerates are collecting in
subscriber fees.
So the real issue is whether a network can make more money from
subscriber fees than the local ad insertion revenues that are
currently flowing to the cable/DBS companies. Giving these channels
to affiliates is a move in the wrong direction. That would only
generate more revenues for the independent broadcasters, and it could
mean a loss of subscriber fees.
Giving the same content to cable and OTA broadcasters would undermine
the current leverage that the conglomerates have. That is, it would
not be possible to hold popular content hostage in order to push up
the price of other channels.
If Must Carry and re-transmission consent were to disappear, then
what you are suggesting would most likely happen. But the balance of
power would shift in favor of the distribution channels - i.e. the
Networks might need to pay for carriage on each platform - cable,
DBS, broadcast. Of course, this IS the way that it SHOULD work in a
real marketplace.
Regards
Craig
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